| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Foreigners Dive Into Treasurys
Long-Term Securities Lead November's $118.3 Billion Spree |
THE WALL STREET JOURNAL - Jan. 20, 2010 - By TOM BARKLEY And BRADLEY DAVIS
International buyers ramped up their purchases of U.S. government debt in November, pouring in a net $118.3 billion into Treasury notes and bonds and helping prop up record sales of Treasury debt.
Purchases rose sharply from $38.9 billion in October, helped by renewed demand from investors in the U.K., according to government data released on Tuesday.
Foreign demand—investors outside the U.S. own about 50% of U.S Treasurys outstanding—is crucial to holding down U.S. government bond yields, keeping borrowing costs in check not just for the federal government, but also for consumers and companies. Treasury yields are the benchmark for many types of fixed-rate borrowing, including mortgages and corporate bonds.
Demand continued to switch from short-term debt to longer-term securities, a good sign for the U.S. government as it tries to sell longer-term notes and bonds to fund a record budget deficit—seen around $1.4 trillion for the current fiscal year through September 2010.
Net foreign purchases of long-maturity U.S. securities totaled $114.5 billion, the most since May 2007, according to the monthly Treasury International Capital report, known as TIC.
The report gave heart to investors worried that demand for U.S. assets may decline as the deficit rises. "So far nobody's voting with their feet," said David Ader, head of government bond strategy at CRT Capital Group LLC.
China, the largest holder of U.S. government debt, also moved its portfolio toward longer-term government debt. China's holdings totaled $790 billion at the end of November, down from $799 billion the month before.
In the past six months, China has been a net seller of U.S. government debt. The country has sold $100 billion in Treasury bills and bought $70 billion in Treasurys with maturities of more than a year. The change indicated China probably isn't planning to increase its ownership of U.S. debt, and instead is changing its Treasury allocation toward longer-term debt, said Alan Ruskin, global head of currency strategy at RBS.
Japan, the second-largest foreign holder of U.S. Treasurys, increased its holdings to $757 billion from $746 billion; the U.K.'s holdings rose to $278 billion from $230 billion.
Private investors, including international and regional organizations, bought a net $87.1 billion in longer-dated U.S. debt, a record high. Official foreign buyers, such as central banks, bought $31.2 billion of longer-dated Treasurys in November.
Excluding transactions that didn't occur on an open market, foreigners bought a net $126.8 billion in long-term U.S. securities in November, after revised purchases of $19.3 billion in October, according to the report. This figure is closely watched as a better reflection of market demand for dollar-denominated assets than the headline figure.
Signs of rising demand could be seen in the Treasury market during November. Treasury yields, which move inversely to prices, dropped that month only to rise sharply in December as investors shed government debt to buy riskier securities. The 10-year yield hit a low of 3.15% in November and then rose as high as 3.90% in December. The two-year yield fell to 0.61% in November, and then jumped as high as 1.22% the following month.
This implies that foreigners may well have reversed some of their purchases, although the December government debt sales saw strong demand, buoyed by the higher yields. Bond yields rise when prices fall.
Tuesday, Treasurys took their cue from stocks and overseas government bond markets to end lower. The benchmark 10-year note fell 8/32 point, or $2.50 for every $1,000 invested, to yield 3.707%, up from 3.676%.
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